At a legislative town hall featuring 21 lobbyists, lawmakers and business leaders, the candid comments from panelists seemed to suggest a looming budget compromise is a fool’s hope.

“You’re not going to get a tax increase through this Senate,” said Sen. Michael Roberson, R-Las Vegas, one of the panelists. “You’re simply not going to get it.”

He clashed again with AFL-CIO lobbyist and co-panelist Danny Thompson. Now both men have said they are “offended” by what the other has said about collective bargaining. Roberson’s bill to change collective bargaining law died in committee last week.

Hickey gave each panelist about five minutes to speak, which was enough time for each panelist to repeat a few key talking points.

“It seemed business as usual,” said Jim Cooley, lobbyist for the Nevada Libertarian Party. “It was basically, ‘this is my pitch.’”

Each speaker brought his or her own expertise to the discussion. But the debate was framed by the needs and wants of each participant.

Washoe County Superintendent Heath Morrison called for education reforms paired with more funding than Gov. Brian Sandoval has proposed in his general fund budget.

“We must improve education,” Morrison said. “Only by providing an educated workforce are businesses going to want to come to Nevada and stay in Nevada.”

“It is no longer sufficient to say that the government needs to do more with less,” Muth said. “It is time for us to start saying that the government needs to do less with less.”

Heidi Gansert, Sandoval’s chief of staff, did her best to put a new spin on the talking points representatives from the governor’s office have used to defend the budget since its January release.

“We recognize that there are some very difficult cuts,” Gansert said. “It’s time that we have to do that.”

Hickey organized the town hall meeting to bring a diverse crowd to one place to debate, as the title of the forum suggested, “the recession, revenues and Nevada’s recovery.” He said earlier that he wanted Nevada’s political players to put their “cards on the table.”

At least one lobbyist in the audience said he was discouraged that the cards the players revealed today were the same hands they were holding two months ago.

“I think it shows how firm both sides are in their positions, which means we probably are not playing for an end game in that first week of June,” said Paul Enos, a lobbyist for the Nevada Motor Transport Association.

Former Republican Sen. Randolph Townsend spoke at the event and channeled his colleague, former Republican Sen. Bill Raggio, in calling for more respect in the legislative debate.

“Deal only with the issue in front of you,” he said. “Don’t tie the issue to the person … the day you make it personal you lose … It’s a lot harder to become vitriolic when it’s somebody you know.”

Members of the public also joined by watching online or attending the town hall at the Legislature. Robert Stransbury, 64, is a retired teacher and Carson City resident who listened to the debate from the Legislature.

“I took away that there’s some very strong opinions on opposing sides,” he said. “I hope that they can agree and come together and get a budget.”

To that end, Townsend had some advice for the current legislators struggling to do more than cobble together a budget at the last minute.

“Once in awhile you have to walk out of the [legislative] building, breathe the clean air and try to get a different perspective, and right now that is what the building needs,” he said.

The 120-day legislative session is scheduled to end during the first week of June.

Instead, he said, he wanted to work with colleagues to incorporate his ideas into their bills.

“I think the number of bills introduced, it’s too much,” he said. “…Our sole focus should be on job creation, diversifying the economy, education, broadening the tax base and redistricting.”

Both Hogan and Kihuen said they want to hone in on their committee work. Hogan, who has been a legislator since 2004, said this might be his “last shot” to throw his weight into staving off budget cuts he opposes.

“I’m happy with what I’m doing, and I think it’s going to do my constituents quite a bit of good,” he said.

On the other hand, Assemblyman Tick Segerblom, D-Las Vegas, has introduced more bills than any other legislator.

He has 31 bills to his name.

That exceeds the statutory limit of bills he is allowed to introduce, but Segerblom has also picked up legislation first proposed by outgoing Democratic legislators: Sen. Terry Care, Assemblyman Harry Mortenson and Assemblyman Jerry Claborn.

He disagrees that a Legislature should restrict itself to the subjects it tackles.

“You can only talk taxes for so long,” Segerblom said. “At the end of the day, the other state’s issues have not gone away.”

Members of Nevada’s Assembly are allowed in statute to request up to 13 measures – bills, joint resolutions, concurrent resolutions, memorials and acts – and Senators are allowed up to 26 measures.

Legislative committees, constitutional officers and legislative leadership, among others, can request more measures.

The bill count for this 120-day legislative sessions is above 1,060, about on par with the past several legislative sessions.

Since the Legislature does not work most weekend days, the 120-day session is more like 90 days. Even given a grueling schedule of 14-hour workdays, that would leave little more than an hour to hear each bill equally.

Knowing that discussions of the governor’s proposed budget and the drawing of political districts will consume whole days, legislators will have to slough off some bills.

CARSON CITY – Gov. Brian Sandoval has said before that he can reform Nevada’s education system while still reducing the budget allotted to the state’s K-12 system.

But the cost of several of his proposals drew opposition at a legislative hearing today.

Assembly Bills 554 and 557 would establish a $20 million pot of merit pay for teachers, allow for open enrollment at schools regardless of geographic boundary, give letter grades to schools and end the policy of social promotion.

Representatives from the school districts of Clark and Washoe counties said the reforms, while laudable, required more money than Sandoval has budgeted for.

Joyce Haldeman of the Clark County School District said that pay for performance – basically, a system of awarding bonuses to good teachers – comes at the expense of cuts to programs like class-size reduction and full-day kindergarten.

“Without the resources, this bill is a difficult task for the school districts,” said Craig Hulse of the Washoe County School District.

On the issue of social promotion, legislators asked about the costs and how many students could be held back under the proposal.

Social promotion is a policy whereby students jump from grade to grade regardless of how much they learn each year.

Ending that policy would mean students who cannot read at grade level may be held back, or face summer school or other remediation. These extra programs could potentially cost the state money.

Dale Erquiaga, Sandoval’s senior adviser, said he did not have an estimate of how many students would be affected.

He did, however, criticize the state’s current policy, saying it leads students to failure.

“Unfortunately it causes critical failure later in the system,” Erquiaga said. “They’re going to fail, they’re going to drop out, they will not graduate later in life.”

Legislators on the Assembly Education committee considering the bills usually debate the policy measures of bills. But during this budget-conscious session, money seems like a difficult issue to avoid.

Craig Stevens of the Nevada State Education Association argued against the merit pay bill not for its policy, but because of the context surrounding the bill.

He said it was wrong to cut the pay teachers currently receive for the years they have worked and the advanced degrees they have attained – totals for which run into the hundreds of millions – and replace that with $20 million in merit pay.

The open enrollment and letter grade sections of the bills were not as controversial. Ken Turner of the Clark County School District, however, said that the school district opposes grading schools with letter grades because that system is too simplistic.

The committee did not yet vote on the bills, instead cutting the meeting short and ending at 8 p.m.

CARSON CITY – A poll released today shows that most Nevadans hold government workers in high regard.

Nevadans for Nevada, a collective of largely public sector unions, hired Grove Insight to conduct the poll of 500 registered voters.

The poll, which was conducted last week, comes as the salaries, benefits and contracts of unions and public sector workers are increasingly in the public spotlight.

Nick Di Archangel, spokesman for the Service Employees International Union, said that public workers needed to gauge public opinion in lieu of high-profile legislative battles like the one still unfolding in Wisconsin.

“I’ve worked in news for 20 years,” Di Archangel said. “I’ve never seen labor covered like this. … With so much scrutiny on labor unions, it was crucial to find out where people fell.”

Nevada’s Legislature is considering several budget proposals that would reduce salaries for public employees. Legislators may also change how public employees bargain for contracts as well as what they pay into retirement and benefit plans.

Di Archangel said the poll shows that most Nevadans hold favorable views of public employees.

The pollsters for Grove Insight worded the question this way:

“Please tell me overall, do you have a very favorable, somewhat favorable, neutral, somewhat unfavorable or very unfavorable impressions of public employees?”

Among the 500 voters who answered, 61 percent held favorable views of public employees, 22 had a neutral opinion, 11 percent had an unfavorable view and 6 percent had no opinion.

In a press release from Nevadans for Nevada, the union group also highlighted that their poll supports raising taxes.

The question on the poll read:

“Right now, Nevada is facing a ONE-POINT FIVE billion dollar budget shortfall. Governor Brian Sandoval has refused to consider any compromise that includes raising some taxes – even if that means deep cuts to local schools. Do you approve or disapprove of Governor Sandoval’s position?”

While 12 percent remained neutral, 31 percent approved of the governor’s position while 57 percent disapproved.

CARSON CITY – A two-hour review by the full Senate today of Gov. Brian Sandoval’s proposed two-year, $5.8 billion general fund budget spent a lot of time on what his spending plan could mean well into the future.

A report to the state Senate, meeting as a Committee of the Whole to hear an update on the recommended budget, shows the danger of future budget shortfalls because of the use of one-time funding options by Sandoval to balance the upcoming 2011-13 budget that will start July 1.

The 2013-15 budget faces a nearly $1.1 billion hole because some of Sandoval’s proposed revenues will not recur in future budget years, according to data provided by legislative fiscal staff.

Senate Majority Leader Steven Horsford, D-Las Vegas, said it is not responsible for lawmakers to approve such a budget.

“This governor’s budget creates a $1.2 billion-$1.3 billion hole in the next budget in 2013,” he said. “That is irresponsible of us as legislators to create a hole for another Legislature to deal with.”

The Sandoval administration rejected the criticism, saying decisions have to be made about the budget every legislative session. The analysis was also based on no revenue growth, which is unrealistic.

“There are decisions that will have to be made next time in the budget just like there are every time we put a budget together,” said state Budget Director Andrew Clinger. “So to say that we’re going to have a $1.1 billion hole assumes you make no decisions and change nothing and that the economy doesn’t grow at all. And those are just two assumptions that are just not valid.”

The 2009 Legislature approved temporary tax increases to balance the budget. These expiring increases have contributed to the lower revenue projections for Sandoval’s budget.

Today’s budget discussion made it clear the Sandoval administration and legislative Democrats, led by Horsford and his Assembly counterpart, Speaker John Oceguera, D-Las Vegas, remain far apart on an acceptable spending plan.

“I’m not prepared to support the level of reductions that are proposed,” Horsford said at the conclusion of the budget review. “I think there is a lot we can still agree on.

“My hope is that as we talk about the cuts that we will have to make, the reforms that we’ve agreed should occur, that we will also talk about the revenue that is needed to responsibly balance this budget,” Horsford said. “And if we can do that in a cooperative way, then we should be able to close down the budget in a timely manner.

“If not, then it is going to mean doing business in a totally different way than we’ve ever done it before,” he said.

Senate Minority Leader Mike McGinness, R-Fallon, said the briefing was helpful but appeared to be designed to put a scare into his colleagues in an effort to advance the premise that additional tax revenues are needed to balance the budget.

“I think it was probably designed to scare us all a little bit,” he said.

Asked if it worked, McGinness said no.

McGinness said his caucus remains firmly opposed to any tax increases, or the continuing of taxes set to expire June 30, to balance the budget.

Sandoval has said repeatedly he will reject any budget that comes to his office with a tax or fee increase.

With Sandoval’s threat of a veto of any budget with tax or fee increases, Democrats in the Legislature face a tough sell to their GOP colleagues to gather enough votes to override a veto. Democrats would need three Republican votes in the Senate, and two GOP votes in the Assembly, to approve tax or fee increases over the objection of Sandoval.

The hole in future budgets was detailed in a report by Russell Guindon, a fiscal analyst for the Legislature, who said tax revenues would have to grow at 12.6 percent in 2014 and 2015 to make up for the loss of the one-time revenues included by Sandoval for the upcoming budget. Such levels of revenue growth are probably not attainable, he said.

Revenue growth for the state budget is officially set by a panel of private sector appointees called the Economic Forum.

One example of the future budget hole is a plan by Sandoval to borrow on the Insurance Premium Tax to generate $190 million to avoid cuts to various health and human resources programs. This would require payments of $53 million over four years starting in 2014 to pay for the revenue option for the upcoming budget.

Another is the proposal to use $300 million in school district bond reserve funds to fund public education operating costs.

Guindon acknowledged that the future budget hole estimated in his analysis would be less if tax revenues grow.

The hearing was cordial but a request by McGinness that Clinger be permitted to testify in the committee hearing was not granted. Clinger would have been able to provide information on a budget amendment submitted to the Legislature earlier in the day showing $120 million more in revenue for the budget than previously estimated, he said.

Horsford said the budget amendment came late and would have to be taken up at a future discussion.

In a statement announcing the revenue increase prior to the Senate budget update, Sandoval said: “I am pleased to announce that this amendment adds more than $120 million in revenue projections – the majority of which I have directed toward K-12 education.”

The budget discussion in the Senate did not include this new revenue, which is coming primarily from adjustments to the Net Proceeds of Minerals Tax and a higher level of federal support for Medicaid based on per capita personal income in Nevada.

The revenue increase does not mean more money in Sandoval’s budget, however. Instead, Clinger said the additional revenue will mean a reduction in the amount of bond reserve funds held by school districts needed to fund public education operating costs for the next two years.

Heidi Gansert, chief of staff to Sandoval, also said the insurance premium tax proposal is a last resort that will be used only if needed. Gansert also questioned the pay-back numbers discussed in the Senate hearing.

There was some modest cause for optimism about the budget. Clinger said he expects the Economic Forum to revise its revenue projections upwards when it meets May 2. Any additional revenue would be used by Sandoval and lawmakers to restore critical cuts to the budget.

Audio clips:

Senate Majority Leader Steven Horsford says the hearing was intended to show the challenges facing lawmakers in balancing the budget:

CARSON CITY – Nevada Health and Human Services Director Mike Willden said today he believes the state can reduce Medicaid rates to medical providers as proposed in Gov. Brian Sandoval’s budget, but acknowledges the issue is “muddy territory.”

Willden’s view suggests the Medicaid reductions can be imposed without the state being subjected to successful legal challenges based on a recent appeals court ruling.

A 9th Circuit Court of Appeals ruling rejecting Medicaid provider rate cuts in California did not provide guidance on how to impose such reductions based on a reasonable access standard, he said. Nevada is included in the 9th Circuit Court’s jurisdiction.

The Medicaid rate reductions recommended for a variety of medical providers would save nearly $60 million in general funds over the two-year budget.

If the reductions cannot be implemented for Nevada health care providers, there would be another funding gap in Sandoval’s budget.

The U.S. Centers for Medicare & Medicaid Services (CMS) is working on the issue of reasonable access standards but does not expect to have final guidance for states until the summer, after the Legislature has finalized its two-year general fund budget, Willden said.

“The court did not provide any definitive road map,” he said. “We don’t know what the reasonable access standard is. We believe we can reduce the rates.”

At a Senate Finance hearing today on Medicaid reductions proposed for the skilled nursing industry, lawmakers were given a legal opinion saying the cuts would violate federal law based on the 2010 appeals court decision.

The analysis by the legal firm of Lionel, Sawyer & Collins says the proposed reductions of $20 per Medicaid resident per day are included in Sandoval’s budget, “purely as a means to alleviate the budgetary crisis.”

The cuts to reimbursements for skilled nursing facilities would save about $10 million in general funds over two years.

The appeals court ruling said reductions are allowable but must first be analyzed to ensure the rates are reasonable.

The legal opinion said no such analysis has been done by the Department of Health and Human Services for Sandoval’s proposed reductions.

“Therefore, the rate reductions, if implemented, will be a violation of federal law and will leave Nevada vulnerable to a series of costly legal challenges, which could well result in imposition of an injunction against the rate reductions, given the current judicial precedents,” the analysis says.

The cut is one of several Medicaid rate decreases proposed for many types of medical providers as a way to help balance Sandoval’s proposed $5.8 billion general fund budget.

Willden said the legal issues involve all the proposed provider rate reductions in the budget, not just the $20 per day per Medicaid resident cut aimed at the skilled nursing industry.

“We’re hanging our hat on the U.S. Solicitor General’s amicus (friend of the court) brief to the 9th circuit saying we need access standards and they need to be reasonable,” he said. “CMS is doing that. That process is ongoing.

CARSON CITY – Assemblyman William Horne, D-Las Vegas, may have just found the state $20 to $35 millions in new revenue.

Under his proposal, if you lose or do not redeem a paper voucher printed from a slot machine, the state would sweep that money into its coffers as unclaimed property. Right now, casinos pay taxes on that money and count the remainder as revenue.

Horne argued that the person owns the voucher rather than the casino. Additionally, he said it would be impossible to track down the owner of the voucher. So that money should revert to the state as unclaimed property.

The bill comes as lawmakers are desperately searching for money to fund state services.

Representatives from the gaming industry testified against the bill. Conversely, progressive groups testified in support of the bill because any new revenue would help fund programs they want to save from elimination.

Pete Ernaut, lobbyist for the Nevada Resort Association, said that the underlying mission of the state’s unclaimed property is to match the property with its owner.

Ernaut said that the state Treasurer, who handles unclaimed property, would have to try to match every voucher with its owner. This could mean that the state would have to spend money to try to find the owner of a $1 voucher.

Ernaut gave the committee the $20 to $35 million estimate of the value of all tickets that currently go unclaimed.

Horne disagreed with Ernaut, saying that there is no identifiable information on the voucher.

“We also would contend that this does not become the property of the player until it is redeemed,” Ernaut said.

This would negate Horne’s argument that the voucher becomes a player’s property – not the casino’s – when the slot machine spits out a ticket.

But Horne dismissed Ernaut’s arguments.

“The opposition, they would like this to be a very complicated issue,” Horne said. “In the end, this is a simple case on unclaimed property and who should get it. All the other stuff just muddies the waters and tries to make it more complicated than it actually is.”

CARSON CITY – Democratic legislative leaders today questioned a comment from the Sandoval administration that two job creation bills they are pursuing will be vetoed for creating a hole in the governor’s recommended state general fund budget.

But Gov. Brian Sandoval reiterated his veto position, saying the two measures would create more than a $400 million hole in his proposed budget without offering any way to close the gap. Most other bills won’t be evaluated until they reach his desk, he said.

“There is a big budget issue there,” he said today. “Because they create a major hole in the budget without the provision of any type of strategy or plan as to how to back fill that loss of revenue.”

At a Monday briefing, Dale Erquiaga, senior adviser to Sandoval, said any measure that creates a hole in the proposed $5.8 billion general fund budget faces a veto from the governor.

The unequivocal comment was a departure from past statements that Sandoval will evaluate each bill once it reaches his desk before deciding to sign or veto the legislation.

In discussing several legislative priorities today, Assembly Speaker John Oceguera, D-Las Vegas, was asked to comment on the Sandoval administration veto threat.

“The governor also said before that he would wait until the bills went through both houses to see how they came out before they got to his desk before he talked about vetoes so it seems like there’s a change of position there,” he said.

“I think what we’ll do about it is we will work with business, who is fairly excited about some of these bills, to try to override a veto,” Oceguera said.

Senate Bill 192, would direct 2 cents in existing property taxes to Clark and Washoe counties to use to bond for public works construction projects. It passed the Senate on a party line 11-10 vote on Monday and headed to the Assembly.

Nevada Senate Republicans said the measure would create a $94.3 million budget hole.

Sandoval wants to use the money to support the Nevada System of Higher Education.

Assembly Bill 183 passed the Assembly on Friday, also on a party line 25-16 vote. It will now be considered in the Senate. It would allow school districts to use $400 million in bond reserve funds to improve older schools.

Sandoval has instead proposed that the money be used to fund school district operating costs as part of his budget.

Audio clips:

Gov. Brian Sandoval says the two jobs bills create major hole his budget:

Professor Michael Young began to think last year that he should look for a job outside of Nevada.

It was not the craziest thought; the recession was in full swing and legislators were slashing the higher education budget.

Young was a departmental director at the Desert Research Institute. Now he’s an associate director at the University of Texas, Austin.

During the recession, Nevada has had a difficult time keeping research professors like Young.

The best students already seem to be leaving for out-of-state colleges. The same thing seems to be happening with faculty.

“It turns out, ironically, that the state of Texas has big economic problems as well,” Young said in a phone interview. “But there’s a very fundamentally different level of understanding in terms of what the university does for the economy and for the future of the state [in Texas]. You don’t really hear that a lot in Nevada.”

What you do hear is the president of the University of Nevada, Las Vegas telling faculty that the university may go bankrupt. You hear Gov. Brian Sandoval proposing a $163 million cut to the state’s universities and colleges.

At the same time, Nevada’s public figures have championed economic diversification through hiring innovative faculty, providing start-up funds and building a research engine. These professors will presumably leverage millions in federal grants and build Reno or Las Vegas into high-tech research hubs where start-ups will provide manufacturing jobs.

It sounds great. One day we will talk of Silicon Valley, Seattle and Reno as the tech hubs of the West.

But then reality sets in.

“It’s hard to imagine a young faculty member … why would that person go to a university where 30 percent of its budget is being cut?” Young asked. “It’s not an incentive that a lot of young people would take.”

Young said he left Nevada for various reasons, among them the state’s fiscal woes.

Steven Wells, president of the DRI, said that the institution has lost 21 faculty since 2008.

“We’ve had people who have been here five to ten years suddenly leaving and our investment in them goes with them,” he said. “Michael Young is a prime example. I tried to do whatever I could to keep him.”

Wells said that researchers like Young aren’t tenured. They support themselves through grants they receive largely from the federal government.

But the DRI’s administrative costs do come from the state. The state must also attract graduate students to work under researchers like Young.

Data provided by the Nevada System of Higher Education showed that Young had brought about $3 million into Nevada via grants during the past two years. He’s just one of many professors at the DRI, UNLV and the University of Nevada, Reno who collectively brought in millions of dollars to the state and have since left.

Where’s the money?

The recession has left the state’s coffers running dry, the federal stimulus is running out and “new spending” are dirty words at the Legislature.

A Senate committee on economic development heard testimony this week from Croce, who talked about expanding his organization’s link between university research and the renewable energy sector.

Senators immediately wanted to know the cost.

“Does that mean investing general funds into the system so that they have the capacity in their budget to go out and recruit their researchers?” asked Sen. Ben Kieckhefer, R-Reno.

Croce replied that yes, Nevada would be “literally buying” faculty to come to Nevada.

Sen. Ruben Kihuen, D-Las Vegas, followed by asking what the state would need to do.

“At a minimum we have to stop the bleeding and make sure we have a healthy NSHE base,” he said.

Higher ed needs “drastic reform”

Others argue that the higher education system already has enough money.

“You’re really good at coming and asking for money,” said Sen. Barbara Cegavske, R-Las Vegas, to Dan Klaich, NSHE chancellor, at a higher education hearing this week. “But what we need now is help and places where we can make reform. Drastic reform.”

Her comments echo those of the governor’s senior adviser, Dale Erquiaga.

“You’ve got to have money to spend money,” he said during a January press conference.

Lt. Gov. Brian Krolicki said that the universities can help with economic development, even as their budgets shrink.

“It can be done today,” he said. “It’s about directing resources.”

He said that universities can help faculty gear their research toward commercialization.

Nonetheless, those same faculty have been and still are leaving.

“It’s not like you flip a light switch and you get your research back,” Young said. “To me that’s probably one of the saddest parts of the story. …When the economy is doing well, the state is going to continue to suffer through this because the research infrastructure is gone.”

CARSON CITY – About 50 state employees gathered in front of the Legislative Building today to call on Gov. Brian Sandoval to participate in a discussion about potential tax increases to help fund the state budget.

With the wind blowing at a steady clip, Vishnu Subramaniam, AFSCME Local 4041, chief of staff, said: “This is a great analogy of what’s going on in the state. They’re trying to blow us away while we’re providing services.

“We need a broad-based corporate tax,” he said. “We need to be having a talk about revenues. The talk of cuts is a red herring.”

Subramaniam said by not having a revenue debate, the state budget under review in the 2011 legislative session is focused on only one side of the equation: budget reductions.

Sandoval has rejected any proposals to increase taxes or fees to help balance the budget. He has submitted a $5.8 billion general fund budget that he says does not include any new tax or fee increases.

John Kinney, a custodial maintenance worker at Western Nevada College, held a sign that said: “Sloppy thinking equals quick fixes! Gov: you can do better!”

“I’d like them to take away the 5 percent cut and give us our furloughs back,” he said. “We’re getting cut more than anyone else. We’ve had furloughs for the last three years.

“I rented out my house because it was almost foreclosed on,” Kinney said. “If I wouldn’t have rented it out, I would’ve lost it.”

Senate Majority Leader Steven Horsford, D-Las Vegas, spoke to the assembled group, saying the cuts proposed in Sandoval’s budget need to be given a human face to show how they affect nurses, social workers and the community as a whole.

Asked to comment on the gathering, Dale Erquiaga, senior adviser to Sandoval, said the 5 percent pay cut being proposed for state workers is only slightly larger than the 4.6 percent reduction in place now. While state employees are also getting unpaid days off in exchange for the reductions, a practice that would be eliminated in Sandoval’s proposed budget, state government is a service industry and the needs of the public have to be considered, he said.

Erquiaga also noted that Sandoval is seeking the same 5 percent cut for public school teachers and university faculty as part of his “shared sacrifice,” although it will be up to school district boards and the Board of Regents to decide whether to implement such reductions.

“You can’t ask state employees to carry it all and have university faculty take none,” he said. “I think the state employees would agree with that.”

Erquiaga said there is no reason the Legislature can’t have a discussion of new taxes or revenues, but that lawmakers should do so early on in the session and in a public forum so the public can participate.

Not in the last hour of the session in the dead of night, he added.

Sandoval would not be opposed to a discussion with lawmakers about putting a tax increase before the voters, Erquiaga said. It would depend on the details: what type of tax increase, who would vote, and how long it would last,” he said.

“He has never said he would prohibit the public from voting on taxes,” Erquiaga said.

Capital Bureau Chief Sean Whaley contributed to this report.

Audio clips:

Sandoval Senior Adviser Dale Erquiaga says state government is a customer service industry:

CARSON CITY – For Gov. Brian Sandoval, every penny counts as he tries to balance a two-year state budget with drastically reduced tax revenues.

At the Board of Examiners meeting today, Sandoval was able to eliminate a new vehicle purchase worth about $40,000 for the state dignitary protection program by finding a suitable vehicle in the state motor pool to fit the bill.

The Nevada Highway Patrol had initially proposed purchasing a vehicle for the program, which provides security to the governor and members of his family.

Under past administrations and when the state had more revenue, items like the vehicle purchase likely would have been approved without a second thought by the board.

The board, made up of Sandoval, Secretary of State Ross Miller and Attorney General Catherine Cortez Masto, also approved five new lease agreements for state agencies that saved just under $150,000. The lease extensions and renewals were negotiated at lower rates due to the weaker commercial real estate market.

Sandoval, who previously served on the Board of Examiners as attorney general, also asked several questions about the various contracts set for board approval to ensure the spending was justified.

“I think we should be a good steward of every dollar that we spend whether it be federal funds, highway funds or general funds,” he said. “Every dollar matters.”

Sandoval has proposed a $5.8 billion general fund budget for the coming two years that contains no new taxes or fee increases. The budget does impose a number of significant cuts to education and other programs, however, which have generated some criticism from affected groups and their advocates, but praise as well from others for holding the line on spending.

The Legislature, which convened Monday, will spend the next four months reviewing Sandoval’s spending plan and finalizing a budget.

CARSON CITY – The Republican minority leadership in the Senate and the Assembly has called on critics of GOP Gov. Brian Sandoval’s proposed budget to trade their “rhetoric for a plan.”

The comments in a letter from Senate Minority Leader Mike McGinness, and Assembly Minority Leader Pete Goicoechea, are in response to criticisms from Democrat lawmakers on various elements of Sandoval’s proposed budget released Jan. 24.

Democrats have not yet offered an alternative to Sandoval’s $5.8 billion general fund budget that includes many program cuts and also shifts the cost of some programs to the counties. Democratic leaders last week said they first have to assess the depth of the cuts in Sandoval’s budget before offering an alternative.

In the letter released Tuesday, the two lawmakers said: “We ask them to join us in supporting the governor’s vision of service before self – a vision that reins in spending, makes government more responsive and calls for shared sacrifice over individual gain.

“We hope they will join us, but should they oppose our efforts to reform government they owe it to you to provide a plan of their own,” McGinness and Goicoechea said. “They owe it to every Nevadan to begin providing specific details of not just their plan, but also how they propose to fund it.

“Nevadans deserve an honest and open debate. We call on Nevada leaders regardless of ideology or party affiliation to spend a little less time on rhetoric and a little more time working together toward real solutions.”

The lawmakers also suggested that Democrats are attempting to mislead the public about Sandoval’s budget.

“Unfortunately some have chosen to dust off an old political strategy designed to confuse the public,” they said. “By presenting a barrage of numbers from a variety of sources, they seek not to advance an agenda of their own but, to confuse the issue.”

Senate Majority Leader Steven Horsford, D-Las Vegas, last week called some of Sandoval’s budget numbers on public education funding misleading and understating the magnitude of his proposed cuts. He called the use of the numbers “trickery.”

Horsford said Sandoval should use the legislatively approved budget as of the 2009 session, not the budget that was changed as a result of further cuts made in the February 2010 special session, for comparison purposes. Sandoval’s budget cuts don’t appear as severe when compared to the further reduced budget as a result of the special session.

Chief of Staff Heidi Gansert said during the hearing last week there was no intent to mislead, only to use the most current budget numbers.

Republican lawmakers are not unified, however, in support of Sandoval’s budget. Long-time state Sen. Dean Rhoads, R-Tuscarora, told the Las Vegas Sun on Tuesday that tax increases may be necessary to balance the spending plan.

He made his comments after hearing the effect of Sandoval’s proposed cuts and program shifts on a variety of critical programs, from mental health courts to child welfare.

Democrats in the Senate would need support from three Republicans to get the 14 votes needed to raise taxes. Assembly Democrats would need the support of two Republicans to get the 28 votes they would need. A two-thirds vote would be required to raise taxes and override a governor’s veto.

Newly elected state Sen. Michael Roberson, R-Las Vegas, has said Horsford does not have the votes in the Senate needed to raise taxes.

His comment came after Horsford in early January sent a letter to supporters and constituents suggesting the next two-year state budget is facing an attack from “extreme right-wing” interests who will use the current economic crisis to “dismantle our state.”

All this has come before the 2011 legislative session even begins. The session gets under way on Monday.

Audio clips:

Senate Majority Leader Steven Horsford says Sandoval administration not being clear about the depth of his budget cuts:

CARSON CITY – A proposal in Gov. Brian Sandoval’s budget to raise $190 million in revenue by securitizing the state’s insurance premium tax was called “questionable fiscal discipline” today by Senate Majority Leader Steven Horsford.

Sandoval Chief of Staff Heidi Gansert said the proposal is a “last resort” to be employed if needed to maintain essential services in health and human services and public education.

Members of the Senate Finance and Assembly Ways and Means committees heard details of the plan today during a budget overview by state Budget Director Andrew Clinger.

Horsford said the proposal would obligate future legislatures to pay back the $190 million plus $24.3 million in interest payments to generate the money for the current biennium. Payments of about $53.6 million would be required starting in 2014 through 2017.

Horsford, D-Las Vegas, likened the proposal to a homeowner securing a home equity line of credit to use to pay ongoing expenses rather than home improvements.

“It’s like taking out a second on my house to pay my bills,” he said. “And I think a lot of families that have done that, we have seen the consequences of that approach and it has put people in bankruptcy. How is this proposal by the administration any different?”

Gansert said the decision to seek the securitization was not Sandoval’s first choice, but was included in the budget to protect critical services. The proposal will restore $119 million in cuts to the Department of Health and Human Services, including $54 million to keep personal care services to help senior citizens on Medicaid stay in their own homes.

Gansert said the plan does not raise taxes or take money out of the private sector. It is a last resort and may not be needed if tax revenues come in above the Economic Forum projections, she said.

“The priority of this administration is to allow the economy to recover and to do that we held the line on taxes,” she said. “Is this ideal, absolutely not.”

Sandoval’s $5.8 billion general fund budget, which does not raise taxes or fees, is designed to keep as much money as possible in the private sector to promote job creation, she said.

Clinger noted the plan represents only 3.2 percent of total general fund spending, “so overall it is a very small percentage of total state general fund resources.”

But Horsford said the proposal “kicks the can completely to the next biennium and that is questionable fiscal discipline.”

CARSON CITY – Gov. Brian Sandoval today said he will embark on a multifaceted approach to rebuilding Nevada’s economy by assisting in private-sector job growth, including the creation of a $10 million “Catalyst Fund” to provide one-time incentives to businesses that want to relocate to the state.

Sandoval, who delivered his first State of the State address to a packed Assembly chambers, also wants to double the amount of state general funds invested in the Nevada Commission on Economic Development at a cost of $2.3 million a year.

Economic development was one of the main themes of his address, along with balancing the state budget and education reforms. He received praise for his economic development proposals.

Noting that he developed his plan in cooperation with Assembly Speaker-elect John Oceguera and Senate Majority Leader Steven Horsford, both Democrats, Sandoval said: “I propose a complete overhaul of our state’s economic development program.”

“We propose to redesign the Commission on Economic Development and recommend a 50 percent increase in general fund dollars to run it,” Sandoval said. “A new entity, Nevada Jobs Unlimited, will be a public private partnership existing largely outside state government.

“With a private sector mentality, it will be more nimble,” he said. “And it will be a cabinet-level agency, with the governor joining the lieutenant governor, Senate majority leader, Assembly speaker, and representatives of higher education and other critical stakeholders on the board.”

The new entity will pursue strategies that grow jobs within existing Nevada businesses, as well as recruit companies from out-of-state, Sandoval said.

In the Democrat response, Oceguera said there is bipartisan support for job creation efforts, but that, “we cannot expect businesses to invest in Nevada if we aren’t willing to invest as well.”

Democratic proposals include using public construction money to repair and build an infrastructure for the 21st century and partnering Nevada’s higher education system with emerging technology companies as Arizona and Utah have done.

Oceguera also advocated seeking federal support for a new Interstate 11 connecting Phoenix and Las Vegas, and federal loans to private companies for high speed rail to Southern California.

Sandoval expressed support for both of these transportation projects in his speech.

“A key part of attracting business is to recognize our weaknesses and fix them now,” Oceguera said. “Our ability to grow new jobs paying a decent wage depends on an educated workforce.”

Tray Abney, representing the Reno-Sparks Chamber of Commerce, said he liked both Sandoval’s education reform proposals and his focus on economic diversification.

“Education and economic development are intrinsically linked,” he said. “We need an educated skilled workforce in order to provide the jobs that are coming in this future economy.”

Former Democrat Assembly Speaker Richard Perkins said Sandoval, “had an impossible speech to give” given the economic times.

“If he stays within the constraints of the projections of the Economic Forum, it is really trying to shove 10 pounds in a 5 pound box,” he said. “It is a very, very difficult thing to do.”

Perkins said Sandoval’s economic development plans are “spot on”, but suggested that some of his education reforms may not survive the Legislative process where Democrats are in control.

Another component of Sandoval’s economic development plan is a $10 million “Silver State Works” employment initiative aimed at veterans, unemployment benefit recipients, public assistance recipients and ex-offenders.

A primary goal is to promote a “Work First” culture through employer hiring incentives, on-the-job training and community service. The program is projected to help 10,000 unemployed workers using existing staff resources.

True to his word, Sandoval has proposed a $5.8 billion general fund budget for the next two years that does not raise taxes or fees. Along with the $5.3 billion in projected tax revenue estimated by the Nevada Economic Forum, Sandoval is proposing just over $500 million in additional “revenue reallocations” including $221 million in room taxes that had been proposed to go to teacher salaries but instead would remain in the general fund budget for the next two years.

His plan would also reallocate nine cents of the property tax from Clark and Washoe counties to fund the University of Nevada, Las Vegas, and the University of Nevada, Reno. This transfer would save the state general fund about $121 million.

A final component would transfer $425 million in school district bond repayment reserves to operating expenses for the districts to cover projected shortfalls in sales and property tax revenues, in effect another savings to the general fund.

“When all was said and done, the proposed general fund expenditures in my budget total just over $5.8 billion over the next two years – within 1 percent of general fund spending in 2007,” Sandoval said.

Sandoval has said repeatedly that fostering job creation and growth, not raising taxes on businesses or families, is what is needed to get the state out of the current fiscal crisis.

Sandoval noted in his speech that Nevada’s unemployment rate grew again in December, hitting 14.5 percent.

“In order for Nevada to fully recover, we must focus our energy on job creation,” he said.

To that end, Sandoval is proposing the Catalyst Fund, which will provide incentives to “close deals, finance infrastructure and spur the growth of new jobs.”

“Our future likes in business sectors like technology commercialization, bioscience, renewable energy asset development and defense sector expansion,” he said.

Sandoval cited the company Switch, which developed a two-million-square-foot technology ecosystem campus in Las Vegas, as an example of Nevada’s economic future. The company builds large, secure technology data centers with a telecommunications hub.

“Switch’s vision and innovation are attracting many Fortune 1000 companies to Las Vegas, and they are bringing jobs to Nevada,” he said.

Following the address, Switch founder Rob Roy, who attended Sandoval’s address, said it is time for Nevada to “take a step, really, onto the stage with the rest of America in terms of economic development.”

“We have absolutely put the right man into office to take those things now and really go forward and do some serious economic changes for Nevada,” he said. “We’ve got to move our economy away from just what we’re used to in the past.”

Sandoval’s budget also includes $3 million to help residents of rural Nevada use broadband access to start and grow businesses and telecommute.

Audio clips:

Sandoval says he is proposing a new economic development entity to help create jobs:

CARSON CITY – Local governments would lose some property tax revenue to help fund higher education, and college students could face higher fees, in Gov. Brian Sandoval’s budget to be unveiled Jan 24.

Sandoval, in an interview on Jon Ralston’s Face to Face television program, said both elements are in consideration as his $5.3 billion general fund spending plan is finalized in advance of the 2011 legislative session.

Sandoval said he is considering taking nine cents of the property tax to help fund the state’s community college system.

Sandoval faces a major funding gap between existing spending on state programs and education and available revenue. There have been indications for several weeks that closing that gap will rely in part on shifting some of the cost of running some programs to local governments.

Diverting property taxes to higher education would involve such a shift, since the revenues now are used exclusively to pay for local government and public education. The Nevada System of Higher Education is now funded primarily through the state general fund.

Sandoval said he will not raise taxes or fees to balance the budget.

“We’re only going to spend the money we have,” he said.

Sandoval rejected any suggestion that such moves are “hidden” tax increases, noting that different programs are paid for from different pots of tax money. The question is which pot of money is the best choice to provide the various services, he said.

“The people of this state are paying approximately $20 billion and it’s all going into different buckets, and some buckets are better than others,” he said. “And we’re moving the money where it is most appropriate. There is no doubt about it that the university system is an economic engine in this state and that they provide a great benefit, UNLV and UNR, for the local communities. So we feel that it is appropriate for that property tax to go to the universities.”

Sandoval said any decision to raise student fees will be up to the Board of Regents.

Sandoval also confirmed he is looking at efficiencies in state government to save money where possible.

He also confirmed there will be salary reductions, but said massive layoffs of state employees will not be part of his spending plan.